Stocks gain after record jump in retail sales

Stocks posted major gains on Tuesday after data showed retail sales jumped by a record last month.

The Dow Jones Industrial Average closed up 527 points, or 2 percent, after having opened up over 800 points. The S&P 500 closed up 58 points, or 1.9 percent, after opening up 83 points.

The gains came after data before the markets opened showed retail sales increased by a record 17.7 percent in May, a rebound from the record drop of 14.7 percent in April, raising hopes the economy could start rebounding from the impact of the coronavirus pandemic.

Markets were also buoyed by a clinical trial in the United Kingdom that found that dexamethasone, an inexpensive and common drug, could reduce deaths from COVID-19 in extremely ill patients.

But Federal Reserve Chairman Jerome Powell’s testimony to lawmakers that the path of an economic recovery remains uncertain dampened sentiment somewhat, as did a new high in COVID-19 cases and hospitalizations in Texas.

Markets seemed to be pulling back from major losses last week after some states reported rising coronavirus cases as they start reopening their economies.